Thursday, July 2, 2009

U.S. Senate HELP Committee's Affordable Health Choices Act Would Fine A Person At Least $1,000 For Not Having Health Insurance

On July 2nd, 2009, the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee, of which Senator Orrin Hatch is a member, unveiled a national health care proposal which would force all Americans to carry health insurance and impose a fine of $1,000 or more per year upon individuals refusing to carry health insurance. The fine would be included on one's annual Federal tax return. See the committee's press release HERE; media stories from the Associated Press, the Deseret News, and KSL Channel 5.

The HELP committee's proposal, entitled "The Affordable Health Choices Act" (no numerical designation yet; the 615-page draft is available HERE in PDF format) is one of three different Congressional proposals compared side-by-side HERE on the Kaiser Foundation's website. The other two proposals, one by the Senate Finance Committee, which is also addressing the separate issue of subsidizing health insurance for the poor through Medicaid, and one by a U.S. House Tri-Committee, also would require all people to carry health insurance and impose a tax penalty upon those who don't.

Other common attributes of all the bills include requiring insurance companies to sell coverage to any applicant, without charging higher premiums for pre-existing medical conditions. The poor and some middle-class families would qualify for government subsidies to help with the cost of coverage. The government's costs would be covered by a combination of higher taxes and cuts in projected Medicare and Medicaid spending.

The Congressional Budget Office estimated the fines envisioned by the HELP committee will raise around $36 billion over 10 years. Senate aides said the penalties would be modeled on the approach taken by Massachusetts, which now imposes a fine of about $1,000 a year on individuals who refuse to get coverage. Under the federal legislation, families would pay higher penalties than individuals. The HELP Committee could complete its portion of the bill as soon as next week, and the presence of a government health insurance option virtually assures a party-line vote.

Proposing to force all Americans to buy health insurance exposes the deficiencies of the existing market configuration. An estimated 47 million residents of the United States are without health insurance; 15 percent are illegal immigrants. Many are younger healthy libertarian-oriented yuppies who make good money, but prefer to pay as they go and don't want the bureaucratic hassle of filling out a bunch of forms. But others can't afford health insurance for a variety of reasons; loss of job, pre-existing medical conditions, or make too much to qualify for Medicaid but not enough to buy health insurance.

In addition, providers have been pulling out of networks like Medicare and Medicaid because reimbursement is not sufficient and timely. Private sector workers cannot afford to run up deficits - they lack the power of taxation. Either they cut unprofitable operations, or they go bankrupt. Even some of the liberals on Democratic Underground think forcing people to buy health insurance is wrong.

To persuade people to buy health insurance, one must meet the following criteria:

(1). Must be affordable. No one will be willing to spend more than 5-10 percent of their income on insurance.

(2). Must be universal. No one who applies can be turned down for pre-existing medical conditions.

(3). Must be a sufficient number or providers, and they must have an incentive to remain in business. Lowering malpractice insurance premiums would help.

(4). Eligibility must be limited to legal residents of the United States. Proof of legal residency must be shown. We cannot afford compassion for illegal immigrants.

Here's a list of members of the U.S. Senate Health, Education, Labor, and Pensions Committee, for those who want to contact them and tell them that forcing all Americans to buy health insurance is wrong (instructions on how to contact any U.S. Senator HERE):

Democrats by Rank
-- Edward Kennedy (MA)
-- Christopher Dodd (CT)
-- Tom Harkin (IA)
-- Barbara A. Mikulski (MD)
-- Jeff Bingaman (NM)
-- Patty Murray (WA)
-- Jack Reed (RI)
-- Bernard Sanders (I) (VT)
-- Sherrod Brown (OH)
-- Robert P. Casey, Jr. (PA)
-- Kay Hagan (NC)
-- Jeff Merkley (OR)

Republicans by Rank
-- Michael B. Enzi (WY)
-- Judd Gregg (NH)
-- Lamar Alexander (TN)
-- Richard Burr (NC)
-- Johnny Isakson (GA)
-- John McCain (AZ)
-- Orrin G. Hatch (UT)
-- Lisa Murkowski (AK)
-- Tom Coburn, M.D. (OK)
-- Pat Roberts (KS)

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